Malayan Railway is fighting for the right to fix its own passenger fares and freight rates

KTM seeks to shake off the shackles: Malayan Railway is fighting for the right to fix its own passenger fares and freight rates

Mike Knutto

MOHD Salleh, a 30-year veteran of Malayan Railway (KTM) and managing director for the past three years, is the eternal optimist. He has seen the development of a modern highway network, an indigenous automobile industry, and low-fare airlines savage KTM’s long-distance rail business; watched a 120-year old network generally slip into decline outside the Kuala Lumpur area; and suffered the revenue effects of a government that allows him zero input on fares and freight rates.

Yet, for all that, Salleh remains genuinely confident that rail still has an important role to play in the economy of his country. “Freight should be our main business so long as we have a level playing field with road transport,” he asserts.

At the moment, half of KTM’s revenues are from commuter traffic, followed by 40% from freight and 10% from long-distance passenger traffic. “We want to develop our freight business, especially in the light of the energy crisis. Rail is four times more economic than road so it makes sense to get lorries off the road,” Salleh told me in Kuala Lumpur.

However, his scenario implies sound and modern railway infrastructure nationwide and some latitude on the service charges the railway can levy. He therefore hopes that the arguments he has been putting to government will be reflected in these respects in the 9th Malaysia Plan (RM9), which will cover the period up to 2010 and is likely to be approved in the next couple of months.

It is already known that some areas have been identified for track doubling, notably Sentul-Batu Caves in the Klang Valley and Butterworth-Padang Besar in the northwest, though the latter may not be electrified, and that money will be allocated to other infrastructure improvement to address the considerable safety issues involved.

KTM operates 1700km of track but only 150km between Rawang and Seremban (105km) and Sentul and Port Klang (45km) is double track and electrified. The main emphasis during the 8th Malaysia Plan was doubling and electrifying the 182km Rawang-Ipoh section for 160km/h operation. Work has fallen about 19 months behind schedule but is now proceeding under a new contractor. Commissioning is now expected by the end of 2007 when KTM will be able to introduce rapid intercity trains between Kuala Lumpur and Ipoh and extend commuter services from Rawang to Tanjong Malim.

The Ipoh area will also benefit from a new emu depot, workshops, training centre, and staff quarters now being built at Batu Gajah, just south of Ipoh. The facility is due for completion in mid-2008 to accommodate relocation of the existing dilapidated workshop facilities at Sentul. The new shops will enable KTM to apply the unit exchange maintenance philosophy that will considerably reduce the time taken to maintain stock.

The government has approved a number of feasibility studies for KTM projects designed to improve infrastructure and provide more capacity.

Studies were expected to start by the end of 2005 on the following projects: Serendah-Port Klang-Seremban bypass, rail link to Proton City and Perodua Plant, Serendah, the Tampin-Melaka and Mentakab-Kuantan rail links, commuter services to Gombak/Selayang and Pulau Indah, and a new workshop and yard at Kempas Baru.

KTM is carrying out staged replacement or rehabilitation of track and bridges and culverts for 20-tonne axleloads and to comply with the current geological standards for flood levels. The beginning of last year marked the completion of a Ringgit 34.7 million ($US 9.2 million) bridge strengthening programme on the Ipoh-Padang Besar, Seremban-Johor Bahru, Johor Bahru-Bukit Timah (Singapore), East Coast, and Pasir Mis-Rantau Panjang lines.

Work was also completed last year on two projects for strengthening and improving track in the Klang Valley. At a total cost of Ringgit 32.5 million, one project was to strengthen and refurbish 70km of track in 27 station yards and at other selected locations, while the other was to eliminate sections of weak track formation totalling 29km.

A similar project, costing Ringgit 34.9 million is underway on 150km of the East Coast line, while a Ringgit 29.9 million track strengthening project on the 133km line between Gemas and Kerdau is due for completion in mid-2007.

Although the number of long-distance passengers plummeted from 5.4 million in 1994 to 3.7 million a decade later, KTM’s other passenger operation, commuter, is going from strength to strength through ongoing expansion and greater ease of use (common ticketing, bus feeder services, park-and-ride facilities) which are increasing the popularity of services to such an extent that revenue increased by 11.9% in 2004 compared with 2003. In the same period ridership increased from 24.6 million to 27.4 million (11.4%).

Aggressive marketing has had a positive effect on the long-distance passenger business with revenues reaching Ringgit 67.9 million in 2004, a 10% increase compared with 2003, even though trains to Singapore resumed only in March 2004 following the SARS outbreak, and the Ekspres Kenali between Kuala Lumpur and Tumpat was withdrawn in November 2004 because it failed to reach ridership and revenue targets since its introduction in 2000. Overall ridership, however, increased by 9% to 3.7 million during the year.

Stiff Competition

Salleh says the intercity sector faces stiff competition from budget airline operator, Air-Asia and the East Coast highway from Kuala Lumpur to Kuantan, which is to be extended to Terengganu and Kota Bahru. Systemwide infrastructure improvements will, of course, benefit intercify train operations by pushing up the maximum speed to 160km/h. This will reduce the Kuala Lumpur-Ipoh journey time from 4h 20min today to 2h 15min with five intermediate stops. KTM has also taken delivery of 11 new air-conditioned economy class coaches. Other initiatives include lounges for first-class passengers at Kuala Lumpur Sentral and Singapore stations, and shower and bath facilities at Sentral.

Financially, Salleh is continuing a long campaign for more liberalisation in fares. The last fare increase was in 1992. “It is not too much of an issue for commuter traffic, but it is a matter for concern for long distance passenger and freight services because the government wants them to perform certain social functions without paying for them,” he bemoaned.

He pointed out that in 1992, the cost of fuel was about 10 US cents/litre compared with about 34 US cents today. “That’s three-and-a-half times as much, while we are stuck with the same sort of revenues that we had more than a decade ago. There is certainly no level playing field there,” Salleh added.

He said they were looking for an increase of about 70% on 1992 fares, though that was the ceiling as they had “a little bit of room for manoeuvre” in certain areas.

KTM’s freight division achieved its targeted revenue of Ringgit 107.9 million in 2004. It currently operates 36 daily freight trains hauling about 11,000 tonnes of freight. Main business sectors are Landbridge services (320/o), containers (31%), and cement (16%). KTM introduced cross-border Landbridge services between Port Klang/Pasir Gudang/PTP to Bangkok, Thailand, in July 1995 offering a transit time of 60 hours compared with 120 hours by ship. Future Landbridge services to Phnom Penh, Cambodia; Hanoi, Vietnam; and Kunming, China, will be introduced when the Singapore-Kunming section of the Trans-Asia railway is complete (see separate article).

Salleh explained the main marketing strategies for freight: “We want to develop the freight services unit as a multimodal service provider for both domestic and international markets, focusing on highyield cargo such as containers.

“Thanks to the acquisition of new locomotives, we are hauling heavier trains for conventional bulk movements. We stage road shows with port operators for joint promotion and marketing. And we are implementing an electronic E-Freight system to provide customers with real-time information.”

Running longer and heavier trains has reduced costs and helped to improve profit margins. Key to this achievement is the 20 high-powered Blue Tiger locomotives purchased from General Electric, United States. They are capable of hauling a 2500-tonne trailing load at a maximum speed of 90km/h–which makes KTM the operator of the most powerful fleet of locomotives in the region.

For comparison, they are capable of hauling up to 100TEUs of loaded containers compared with only 40TEUs using older locomotives.

An initial batch of 12 locomotives from the Dalian Locomotive and Rolling Stock Works, China, is currently undergoing testing and commissioning. “These new locomotives will further enhance our rolling stock capacity for heavier trains at a lower unit cost,” said Salleh.

Mike Knutton Senior Editorial Consultant

Mohd Salleh joined KTM as a technical assistant in 1974. He became general manager of the project management department in 1995 and handled various major projects including the ongoing Rawang-Ipoh electrification and track doubling project. He also led the first Klang Valley Electrified Train Services team until the project was completed in 1995. He headed the Malaysian team in various bi-lateral rail-related issues with Singapore, and led the Technical Evaluation scheme for government projects. Salleh became managing director of KTM and a board member in November 2002.

COPYRIGHT 2006 Simmons-Boardman Publishing Corporation

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